Tuesday, October 9, 2012

Protecting Yourself from a Loan Modification Scam


Today, DFI announced that we have filed 40 Statements of Charges against businesses preying on Washington homeowners facing foreclosure.

None of the companies or individuals charged with offering these so-called mortgage rescue services are licensed with DFI, a requirement that provides essential consumer protections. In addition, none of the attorneys charged are licensed with the Washington State Bar Association (WSBA) to practice law in the state.

With this multi-company sweep, DFI intends to send a clear message to unlicensed individuals and companies taking advantage of Washington consumers — “You are not welcome in this state.”

More information about today’s announcement: www.dfi.wa.gov/consumers/news/2012/loan-modification-companies.htm.
  
Protect Yourself from Loan Modification Fraud

Homeowners facing foreclosure need to check the licensing status of companies offering residential loan modification services with DFI, and to check the licensing status of attorneys offering those services with the WSBA.
  • Work Only with Licensed Individuals and Companies
    Make sure you’re dealing with a licensed individual. Companies and individuals must be licensed under Washington’s Mortgage Broker Practices Act, or Consumer Loan Act, before offering to modifying your loan, or taking money from you. Verify a license with DFI at www.dfi.wa.gov or by calling 1.877.RING DFI (746-4334).

    Some companies claim they do not need to be licensed in Washington because they are licensed in another state. This is not true.
  • Work Only with Licensed Attorneys
    Some companies also claim they don’t need a license because there is an attorney involved in the process. That alone is not an exemption from licensing. Attorneys from other states must be licensed to practice law in Washington if they are providing you with legal advice. Verify their law license with the Washington State Bar Association at www.wsba.org.  
  • Read and Understand All Documents
    Be sure to carefully read and understand any documents you are asked to sign. Do not sign anything you do not understand. 
  • Refuse to Allow Direct Access to Checking Accounts or Credit Cards
    Protect your money and refuse to allow direct access to your accounts. 
  • Consider Your Options
    You can contact your lender yourself to seek a loan modification.

    Also, consider taking advantage of free homeownership counseling to see if you qualify for other types of mortgage assistance. Visit www.homeownership.wa.gov for more information.